Envelope cartel fixed Spain’s election printing business for 33 years

The spring of 1977 saw the return of democratic elections in Spain after the end of the Franco dictatorship. At that moment, a number of major stationery companies got together to decide how to share the business democracy brought among each other and fix prices, the National Competition Commission (CNC) ruled on Monday.

The CNC, which initiated its probe on March 15 of 2011, concluded that over the course of more than 30 years, 15 companies had indulged in "price fixing and the sharing out of tenders for pre-stamped envelopes for election processes, and for political parties, including the sharing out of election material produced by political parties for mailbox distribution."

The watchdog said it has imposed a fine of 44 million euros on the companies making up the cartel after determining that they had deliberately divided up the market among themselves in the 1977-2010 period.

It also ruled that the cartel had conspired to "limit the technological development of the manufacturing, distribution and marketing of the market for envelopes." The latter was achieved by companies setting up a technological consortium in 1997 under the name Cover Formas to distribute exclusively to its members technological innovations created by companies in the cartel.

The cartel remained in place for general elections through to 2008. The practice was extended to the elections for the European Parliament, the regions and municipalities as well as referendums on Spain's entry into the North Atlantic Treaty Organization (NATO) in 1986 and the European Constitution in 2005. The CNC said the tentacles of the cartel reached "practically all of the election processes held in Spain from 1977 until 2010."

The watchdog argued that the companies involved in the cartel shared 223 large customers, both private and public, among themselves. These included the Tax Agency, the Treasury General of the Social Security system, the DGT highway safety department, the National Police Board (DGP) and practically all of the government ministries. Its clients among the private sector included banks, big power utilities and multinational telecom groups.

The fines imposed ranged from 5,096 euros to the 20.498 million euros handed out to Unipapel Transformación y Distribución, which was nonetheless exempt from payment for helping the watchdog in its inspection. Antalis Envelopes Manufacturing also got a 40-percent cut in its 7.826 million euros for helping the CNC.